> The reliability of cloud is simply the reliability of hardware; they only provided an abstraction on management not on reliability.
This isn't really true. I mean it's true in the sense that you could get the same reliability on-premise given a couple decades of engineer hours, but the vast majority of on-premise deployments I have seen have significantly lower reliability than clouds and have few plans to build out those capabilities.
E.g. if I exclude public cloud operator employers, I've never worked for a company that could mimick an AZ failover on-prem and I've worked for a couple F500s. As far as I can recall, none of them have even segmented their network beyond the management plane having its own hardware. The rest of the DC network was centralized; I recall one of them in specific because an STP loop screwed up half of it at one point.
Part of paying for the cloud is centralizing the costs of thinking up and implementing platform-level reliability features. Some of those things are enormously expensive and not really practical for smaller economies of scale.
Just one random example is tracking hardware-level points of failure and exposing that to the scheduler. E.g. if a particular datacenter has 4 supplies from mains and each rack is only connected to a single one of those supplies, when I schedule 4 jobs to run there it will try to put each job in a rack with a separate power supply to minimize the impact of losing a mains. Ditto with network, storage, fire suppression, generators, etc, etc, etc.
That kind of thing makes 0 economic sense for an individual company to implement, but it starts to make a lot of sense for a company who does basically nothing other than manage hardware failures.